On February 4, 2025, Governor Gavin Newsom revised California’s anti-gouging protections for rental housing, that’s currently in place to protect victims of the L.A. fires. Here’s a quick summary of the changes: 

Bad News for Landlords: Before February 4, 2025, the anti-gouging protections did not apply to leases over one year. As of February 4, 2025, that exemption has been eliminated. The anti-gouging protections now include all rental housing, regardless of the length of the lease term.

No Change: For properties rented (or offered for rent) within one year before the Declared State of Emergency on January 7, 2025, the landlord can generally charge 10% more than the rent paid (or offered). The amount may be increased by another 5% if previously unfurnished, but now fully furnished. The maximum rental cap for properties previously rented or offered for rent has not changed.

Good News for High-End Landlords: For properties not rented or offered for rent within one year before January 7, 2025, the preexisting rule is that the landlord can generally charge 10% more than 160% of the fair market rent established by the U.S. Department of Housing and Urban Development (HUD). The amount may be increased by another 5% if fully furnished. However, the maximum rental cap was recently eliminated for higher-priced homes, but only if certain conditions are met.

As of February 4, 2025, a landlord has no maximum rental cap under the anti-gouging law if all 4 of the following conditions are met:

1. The property has not been rented or offered for rent within one year before January 7, 2025;
2. The property is located in one of the following zip codes: 90015, 90049, 90067, 90077, 90094, 90210, 90263, 90265, 90266, 90272, 90274, 90275, 90290, 90291, 90292, 90703, 91011, 91105, 91210, 91301, 91302, 91307, 91354, 91364, 91436, 91709, and 91789;
3. The single-family home has 4 or more bedrooms; AND
4. HUD’s 2025 fair market rent for a 4-bedroom unit in that zip code is $5,500 or more.

The rental housing anti-gouging protections are currently scheduled to expire on March 8, 2025 (unless extended). Price gouging is a crime, punishable by one-year imprisonment, plus a $10,000 fine.

Sources: Governor Newsom’s 2/4/25 Executive Order N-17-25 is available at this link. California’s price gouging law is set forth at section 396 of the California Penal Code, available on the California Legislative Information website. The California Department of Justice’s Price Gouging FAQs are available at this link.

-Thank you to Nick Cacarnakis (Beverly Hills Manager) for suggesting this week’s legal tip!

Copyright© 2025 Shared Success Center, LLC (serving HomeServices of America companies). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of February 10, 2025. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.